The Data Center Boom Is Creating Asian Industrial Winners Nobody Associates With AI

The AI supply chain now begins before the server

A GPU cluster cannot be installed simply because chips are available. Electricity has to move from the grid through substations, transformers, switchgear, UPS systems and increasingly sophisticated rack-level power equipment. Once that electricity reaches the servers, much of it becomes heat that has to be removed by pumps, cold plates, coolant distribution units and other thermal-management hardware.

That creates several distinct Asian industrial exposures.

In South Korea, HD Hyundai Electric sits near the utility-facing end of the chain. Large transformers and other high-voltage equipment are difficult to substitute on short notice because they are engineered for specific electrical requirements, require extensive manufacturing capacity and often have long qualification and delivery cycles. The company's multiyear backlog illustrates why the transformer constraint matters differently from a temporary semiconductor shortage. A hyperscaler can redesign parts of a server. It cannot easily accelerate a transformer factory.

Taiwan captures a different section of the same spending. Delta Electronics spans power conversion, data center infrastructure and liquid cooling, while Asia Vital Components and Auras are more concentrated thermal-management suppliers. Reuters reported that Delta is expanding production across Thailand, the United States and China as AI power, cooling and infrastructure demand grows. The company is also shipping megawatt-scale coolant distribution equipment as rack density moves beyond what conventional air cooling can handle. [1]

The investment distinction matters. A transformer maker benefits when power capacity is added to the site. A cooling supplier benefits as power density rises inside the rack. Both can benefit from the same AI capital expenditure cycle without selling a GPU, memory chip or server.

Japan is supplying the electrical layer in between

Japan adds another set of industrial companies that can disappear inside a technology-focused view of the market.

Fuji Electric is one example. Its data center offering includes transformers, switchgear, power distribution equipment and large UPS systems. The company says demand from data centers has contributed to higher orders and is expanding production capacity for transformers and switchgear. It is also increasing capacity for switchgear, control gear and power supply boards used by data centers and semiconductor facilities. Its 2026 strategy goes further, with additional UPS production investment and a new Malaysian factory intended to increase supply for international data center customers. [2]

This illustrates the broader network effect. The data center boom is not merely increasing demand for existing electrical products. It is pulling industrial suppliers into new capacity investments, new geographies and more integrated products.

That matters because the economic dependence can become highly asymmetric.

For a large cloud company, transformers, UPS systems or cooling units may remain only one category inside an enormous capital budget. For a specialized Asian equipment manufacturer, a handful of hyperscale projects can represent a much larger portion of incremental orders, factory utilization and future revenue.

That is the relationship Altsets is designed to examine. The useful question is not simply whether Microsoft, Amazon, Google or Nvidia purchases equipment from a supplier. It is which side of that relationship carries more economic exposure. A customer that is small relative to a hyperscaler's total spending can simultaneously become one of the most important sources of growth for a specialized industrial supplier.

That asymmetry is where second-order AI exposure can become economically meaningful.

Southeast Asia is becoming part of the power supply chain

The chain extends beyond equipment manufacturing.

Malaysia's Johor region has become a major data center construction market, and rising electricity demand is pulling utilities and independent power producers into the same investment cycle. On September 15, Thailand's B.Grimm Power and GE Vernova announced an agreement for a gas turbine and generator for a new plant in Perlis, Malaysia. B.Grimm explicitly linked the project to growing electricity demand from regional data center development. The companies also signed a long-term service agreement covering gas turbines at B.Grimm plants in Thailand. [3]

Each step creates revenue outside the companies normally classified as AI beneficiaries.

The geographic spread is also notable. Korean factories can supply transformers to North American and European projects. Taiwanese companies can provide power and cooling equipment while adding manufacturing capacity in Thailand. Japanese suppliers can expand data center electrical equipment production in Malaysia. Southeast Asian power producers can build generation specifically because clusters of data centers are arriving nearby.

The result is a regional industrial network tied to AI spending even when the companies themselves are categorized as electrical equipment, machinery, thermal management or utilities.

The second-order AI trade is becoming more physical

The next stage of AI infrastructure spending is therefore less about identifying another semiconductor company and more about determining which physical bottlenecks receive the next dollar of capital.

HD Hyundai Electric shows the transformer constraint. Delta Electronics, Asia Vital Components and Auras show the transition toward high-density cooling. Fuji Electric shows how Japanese electrical suppliers can capture spending from substations through UPS systems. B.Grimm shows that Southeast Asian generation capacity itself can become part of the data center supply chain.

These exposures should not automatically be treated as equivalent. Large backlogs can attract new competition. Capacity expansion can eventually weaken shortages. Customer concentration can turn a beneficiary into a risk if data center projects are delayed. Reuters has already noted that supplier share-price performance has become more selective as investors consider valuations, competition and component constraints. [1]

But the underlying supply-chain shift is clear. AI capital expenditure is propagating outward from chips into the industrial systems required to energize and cool them.

For investors mapping the data center boom, the relevant network increasingly extends from a GPU rack in a hyperscale facility all the way back to a transformer factory in Korea, a cooling supplier in Taiwan, a switchgear plant in Japan or Malaysia, and a power project in Southeast Asia.

That is where some of AI's least obvious economic dependencies are beginning to appear.

Sources

1. Clare Jim, "Not just Nvidia: these power and cooling firms are riding the trillion-dollar data centre boom," Reuters, September 1, 2026. https://www.reuters.com/business/energy/not-just-nvidia-these-power-cooling-firms-are-riding-trillion-dollar-data-centre-2026-09-01/

2. "Fuji Electric Report 2026, Energy Segment," Fuji Electric, 2026. https://www.fujielectric.co.jp/ir/library/detail/ar2026_segment_01.html

3. "US-based GE Vernova, Thailand's B.Grimm Power sign deals for gas turbine supply," Reuters, September 15, 2026. https://www.reuters.com/business/energy/us-based-ge-vernova-thailands-bgrimm-power-sign-deals-gas-turbine-supply-2026-09-15/

How to Cite This

For research inquiries or data access: press@altsets.com

Go Deeper